THE IRON LAWS OF DISCUSSING ELITES: Always scratch the other guy's back!

THURSDAY, JULY 26, 2012

Part 3—Fuzzy mind, woolly logic, can't win: A large amount of Chris Hayes’ new book is stuff you’ve already heard, perhaps a million times.

You learn about the way baseball players took steroids to make the big money. You learn about the Catholic Church and its sex abuse scandal.

You learn that Enron got deep in the greed, producing our largest corporate bankruptcy. You learn that the press corps—

Well, to be honest, you don’t learn much about them!

You learn that income inequality has grown in massive ways. And when you reach Hayes’ solutions (see Chapter 7), you’ve already heard them too: Hayes favors progressive taxation and a higher marginal rate. The estate tax should be restored.

What keeps this book from seeming old hat is Hayes’ fuzzy, academized theory about the role meritocracy played in bringing these nightmares to pass. That said, we can’t exactly describe his theory, which is based, in major ways, on very woolly reasoning.

Hayes’ analysis is academized, which may make it sound smart. Everyone from Max Weber to C. Wright Mills gets mentioned.

That said, Hayes’ analysis doesn’t make real good sense in major ways. It's also hard to follow.

For starters, meritocracy is hardly new within the American system. As far back as 1948, a former haberdasher was elected president. He was already serving as president, having been elected vice president in 1944.

In 1953, a son of Abilene, Kansas went to the White House. His father is said to have owned only $24 when his son, the future president, was two years old.

George Romney is often cited as one of the saner CEOs in the older regime. But Romney also rose from nowhere to become head of American Motors. He was a child of meritocracy too—in the 1950s.

Before the 1970s, America weren’t a feudal world where every male was simply handed his father’s income, title and job. As Hayes correctly notes, the system has now been opened up to minorities and women—but we surely don’t want to blame those groups for our gruesome condition.

Does meritocracy lead to oligarchy (or something like that), as Hayes says in this book? If so, we might as well give up right now; we won’t be turning to a system in which someone, perhaps Hayes himself, assigns everyone his or her job and issues us all equal pay. At least since the time of the robber barons, everyone has understood that we human beings, left on our own, will sometimes over-reach, plunder and steal.

Someone has to restrain human greed. But that is hardly new.

In Hayes’ book, you will hear a great many things that you have already heard. You will see these familiar stories stitched together by a fuzzily-reasoned theory. This theory doesn’t make clear sense, but it’s driven along by impressive phrases. (Did you know that inequality is autocatalytic?) For that reason, people inclined to trust authority figures may not realize that Hayes is presenting a fuzzy theory driven by woolly logic.

(Check back tomorrow for Hayes’ logic about his own high school.)

This isn’t a brilliant book. In 2007, Paul Krugman published The Conscience of a Liberal; he discussed the topics Hayes discusses in a much clearer, more accessible way. But Hayes has been picked by a corporate elite to be part of the liberal world’s new breed. Had we been wiser, we would have known that his book would have problems when we saw Rachel Maddow say this:

MADDOW (6/20/12): The great Chris Hayes, who you know from this network, has a new book out called Twilight of the Elites: America After Meritocracy. And in this new book, Chris makes the case that people who are supposed to be good at stuff in our country are no longer good at stuff. We’re sort of calcified in a way in this country that we count on an elite to do everything, but for a very important reason, our elite [pause] sucks. And it’s kind of hard to argue with him on that.

[...]

Joining us now for the interview, my friend and colleague, Chris Hayes, the host of Up with Chris Hayes, weekends on MSNBC, and the author of the brand new blockbuster Twilight of the Elites. Chris, it is great to see you. Congratulations, man! You did it!

After chatting with “the great Chris Hayes,” Maddow delivered her own great pronouncement. We should have known the book would have problems when we saw her say this:

MADDOW: Chris Hayes is the author of Twilight of the Elites, the host of your must-watch weekend viewing, Up with Chris Hayes, weekends from 8 to 10 Eastern right here on MSNBC.

Chris, when you asked me to read the book when it was still in galleys, I said that this is the next big thing that we have been waiting for. And I really think that. I think that this is a, I think this is the concept we need to be debating in terms of talking about big-picture structural stuff about the country and the direction that we’re going. I think this is a huge achievement. I’m really impressed! Congratulations, man!

HAYES: That means a lot, Rachel. Thank you so much.

MADDOW: Thanks.

After helping us know what our “must-watch viewing” is, Maddow heaped foolish praise on Hayes’ book. Hayes returns the compliment in the acknowledgments to his tome. According to Hayes, “Rachel Maddow has been a comrade and a role model: her generosity and integrity [sic] are an inspiration.”

In such ways, an elite’s new stars scratch the great backs of each other.

Please understand: In his book, Hayes talks about many issues and topics which deserve deep exploration. If you’ve seen Hayes on TV, you know that he often discusses such topics, sometimes with thoroughly worthwhile results. His enthusiasm and blatant sincerity are clear in such discussions.

But in his book, Hayes is often quite fuzzy. Last October, the New York Observer recorded his overview of his still-unreleased book:

STOEFFEL (10/19/11): Mr. Hayes is fairly obsessed with wealth inequality and tends to address the topic at a machine-gun clip. “The core economic fact of America since 1973 is rising, accelerating income inequality, more specifically, in a pattern that confers the largest gains to a smaller and smaller group at the top,” he explained.

This is not blowhard punditry; Mr. Hayes, an editor-at-large at The Nation, is deep in it right now. On his days off, he works on revisions of his book, due out from Crown Publishing in spring 2012. “The book is about how accelerating inequality has produced dysfunctional elites,” he explained, “which have produced failing institutions and broken the bonds of trust between the people and the leaders of the institutions.”

It’s true—he does call it fractal inequality. On the other hand, those topics are plainly worth exploring; they define our broken state. But which is it? Did accelerating inequality produce dysfunctional elites? Or have our massively greedy elites produced accelerating inequality (thereby rewarding themselves and their patrons) by purchasing the nation’s politicians, then rotting out our federal tax system and our regulatory structures?

Plainly, these questions matter. Hayes often seems rather fuzzy as he discusses such topics in his book—although no challenge will be offered as Maddow reads her promotional spots for her channel’s newest star.

That said, Hayes almost seems to be soft on greed among his fellow elites. Consider his absurdly high-brow discussion of our elites' “social distance.”

In Chapter 6 (out of seven in all), Hayes seeks to explain the dysfunction of our modern elites. Eventually, he asks a key question: What produced “the financial crisis” of 2008?

Is it possible that Oliver Stone provided the answer in 1987? (See THE DAILY HOWLER, 7/24/12.) Is it possible that greed has become very good (again) over the course of the past fifty years, in the era when, as Krugman describes, the masters of wealth began fighting back against the strictures of the New Deal?

Is it possible that corporate players have been buying pols and looting the world because vast greed is involved? In Hayes’ long penultimate chapter, a different explanation prevails:

Our elites have been destroying the world because of their “social distance.”

Go ahead: Read this long chapter, in which Hayes displays his academized side—and perhaps, his tendency to gild the lily on behalf of his fellow elites. When David Brooks discussed Hayes’ book, he managed to explain why our elites “stink” without ever suggesting that something like greed might perhaps be involved.

Hayes doesn’t go that far, but in a stew of contradictory claims he comes amazingly close. After explaining the difference between vertical social distance and its horizontal cousin, Hayes explains four modern disasters, ending with “the financial crisis” of 2008.

All four disasters have the same cause, Hayes reductively says. The Catholic Church’s sex abuse scandal? The failure to rescue New Orleans after Katrina? The bungling of the last decade’s “long war?” The recent financial crisis?

All four were caused by the “social distance” between our rulers and those whom they rule. Hayes goes on and on in this chapter, asserting this high theoretic.

Why did our financial elites create the scams which destroyed the world? It was because of their “social distance,” Hayes says. Again and again, he makes it sound like things really might have been different had the relevant elites interacted more with the people they were looting. Or something like that: Often, it’s hard to know what’s being said when Hayes dispenses his theories.

Go ahead—read that long chapter. Again and again, Hayes seems to suggest that our financial elites destroyed the world because they didn’t realize what was happening among the lower orders. (Or something like that.)

Long ago, Stone said it was greed. Dreamily, the youthful Hayes has his head semi-off in the clouds.

Brooks disappeared the role played by greed among our elites. Hayes largely muddies the picture. But Maddow is there to tell true believers that this is the blockbuster book we must read.

In such ways, corporate elites ask us to buy the newest line of elite corporate players. This is very much like the system Hayes describes all through his book—a system in which existing elites rig the game in support of family and friends.

Brother Hayes may be fully sincere—but he’s young, ambitious and very fuzzy. This really isn’t the next big thing, despite what they tell you on Hayes’ own channel.

Greed certainly plays a role if you are discussing income inequality. Not so much if you take on other institutional failure is America. A book by Matthew Stewart "The Management Myth" may be more helpful.

Bob, I'll agree that Chris Hayes' explanation stretches credibility. He's missing the fact that America has a stratum of wealthy families, top executives in large corporations, and top executives in large banks. The common demominator is wealth and power, especially power. Those groups are tightly networked together into a protective society. It's the power that provides the wealth for the executives, and the wealthy families use their wealth to buy power.

They depend on a cadre of Lawyers and to a lesser extent, CPA's to rig and enforce the rules of the game to feed to them as large a share of money from financial transactions as they can get. Other than enforcing stability, they don't produce much in economic value.

That class is very much analogous to the European warriors who took control of the land and the farmers on it. The surplus from subsistence farmers supported a smaller privileged class than does the surplus from industrial societies, but distribution of power and the wealth it provides is very similar.

Robert Michels's "Iron Law of Oligarchy" demonstrates how the individuals at the top of bureaucracies use the power of the bureaucracy to maintain their preferred position.

One way that upper class maintains its status is by slipping away from accountability. They do this by claiming they have a right to the wealth and power because of who they are and what they (as a group) do for society. Hayes got that right, but it's only part of the story.

The larger part of the story is how they use their power to create antagonistic groups in society (the classic one in America is race) and give preference to one while oppressing the other. The preferred race then identifies with the superior class who gives them preference and fights off the unpreferred class. Today the immigrants (illegality was a creation of the 1965 immigration law which for the first time put a quota on laborers from Mexico0 as well as other oppressed minorities.

Playing off preferred religious groups is another such use of power. Southern Baptists have been the preferred group in the South for nearly two centuries while Mormons were excluded (they are more successful as evangelists than SBC and threaten them)but with the wealth Romney brings you can see how quickly that power-created distinction as disappeared.

Anonymous, "Institutional failure" is an interesting concept. If I might strain an analogy from population genetics. You can start out with a well-described, stable, and mathematically discreet set of genetic variables in an initial population. Under MOST circumstances, you can predict the genetic makeup of that population at some later point. But, introduce uncertainty in just one variable (mutation rate, geographic isolation, environmental collapse, etc.) and utterly unexpected and profound changes may occur. Lacking any further disruption, these changes themselves become genetically fixed as the new baseline.

In the social and economic spheres, large institutions seem to behave in an analagous way. A estimable meritocracy may, when some of it's members unexpectedly profit through wrondoing or others advance by means other than pure merit, suddenly find itself on a new evolutionary path; factors previously kept in check (greed, ambition, envy) may now supervene in determining that institution's "genetic" profile. The institution (or population) may superficially appear the same, but it's response to the environment (relaxed regulations, lower tax rates) will be very different from that of the original cohort. So, The Best and the Brightest have "evolved" into The Lords of the Universe.

It seems that Hayes is describing the population dynamics, which is fine and good. But, the real issue is confronting and controlling the critical variables (the pernicious and methodical sanctification of greed that Bob describes, legalization of fraud, dismantling of an adversarial media, etc., etc.) that instigated and promoted the "genetic drift" he bemoans. I am not convinced that meritocracy is inherently doomed to corruption. But, like all human institutions, it IS a potentially unstable system, which can be profoundly derailed by even small changes in the environment (moral, philosophical, political).

Yes, I could have, Gladwell-like, made my point with a pithy reference to "strange attractors" and Chaos Theory. But poor Bob, already affronted by Hayes' facile references to fractals, might recoil at even more faddish theorizing in the comments section! That's why I stuck with good old Hardy-Weinberg.

humnmum, the problem that I see is that a small network of powerful people and families dominate the key institutions in America and have been consistently working to dismantle all institutional limitations on their power since the 1930's. Kim Phillips-Fein describes this process in "Invisible Hands: The Businessman's Crusade Against the New Deal".

The process has involved creating new institutions and organizations (Enterprise Institution, etc.) while dismantling the legitimacy of the government to regulate them and dismantling both the legitimacy and legal framework that supported their most significant non-governmental opposition - Organized labor. They have also built the financial support for their own politicians and built the opposing media organizations designed to destroy the legitimacy of the news media and news in general.

Top businessmen have a built-in network to function from. Wealthy families provide both wealth and their children to this network, since it is where the power in the society resides. Wealth must also control its own sources over generations - thus the battle to remove the inheritance tax, remove regulation of the actions of top executives, and lower taxes. The French Aristocracy in per-Revolutionary France did exactly this. They dominated the government and the church (same thing) and were free of all taxes.

It's happening again here in an industrial society rather than in an agricultural society. In both cases their biggest problem has been the power of the central government and the producers of value (workers or farmers.) Their major effort has always been to neuter and control that central government and to reduce the workers/farmers to individual unorganized cyphers.

I don't think it is so much a case of institutional failure as it is a case of a battle among powerful institutions in which one set of closely networked institutions is dominating or even destroying the power of the others to oppose them. Democracy is supposed to prevent this, but the voter suppression we see taking place (Florida 2000 and today) shows that unless democracy itself is protected, it too is useless.

Kim Phillips-Fein describes what is going on as a movement, not as a conspiracy. I call it class warfare. Tomato, Tomatoh. Same thing.

By the way, income inequality has some effect on all this, but it is mostly the goal of the upper class.

Income inequality has feedback effects which make the upper classes less susceptible to interference from the lower classes, but this is more a side effect of the battle of the dominating class to control everyone else than it is a cause of the problems.

I love The Daily Howler, but I'm confused by Bob's criticism of Hayes's theory that "social distance" is a problem among elites. Unless I'm misunderstanding many of Bob's previous posts, he regularly states that the journalistic elite is worthless precisely because its great wealth causes it not to care about the problems of everyday people.

I have small, perhaps petty, problem with the concept of "fractal inequality." Perhaps I'm taking it too literally, or farther than Hayes wants to take it, but in the fractals I've seen, the smaller the fractals, the more at the top there are. One could as easily call that fractal democracy, so ultimately the analogy, as my smart-ass college buddies used to say, leaves me cold.

It reminds me of a joke by Tommy Smothers regarding the population explosion. Tom: Everybody has two parents. Dick: Yes. Tom: Everybody has four grandparents. Dick: Yes. Tom: Everybody has eight great-grandparents. Dick: Yes! Tom: Seems to me the population keeps going down.